Start-up companies plan to speed up the Net

The trouble with a high-speed Internet connection is that the Net itself often isn't very fast.

After years of hype, cable modems and telephone companies' digital subscriber lines (DSL) are finally making substantial inroads into consumer households. But even these turbocharged connections have an Achilles heel--if 2 million people try to download the latest Star Wars movie trailer at the same time, traffic jams on the Internet become a
bottleneck, slowing down each user's connection speeds.

Enter a new breed of company, which aims to bring the most popular content on the Web as close as possible to the user, eliminating the slowdowns created by passing the content through clogged Internet pipes. Using satellite feeds, content caching servers, traffic-routing software, and other technology, companies such as Akamai, SkyCache, and Edgix are vying to colonize what they call the "edge" of the Net with Web content.

This "edge" is any point physically close to the user--the closer the better. Several of the companies are beaming popular content via satellite links directly to storage banks at the users' ISP, just a single digital hop upstream from a subscriber's phone or cable TV line. Others are installing banks of servers inside ISPs internal networks, directly hosting
content from companies like CNN or Yahoo.

Whatever the model, analysts say, these companies are likely to have a substantial impact on the way consumers see and use the Web.

"From users' perspective, all they know is that they're getting the content fast," said Charles Rutstein, an industry analyst with Forrester Research. "That's all that matters."

Implications of the World Wide Wait
The hurdles posed by slow download times are already a very real one for e-commerce and other Internet companies, analysts say. A recent Zona Research report estimated that $4.35 billion in e-commerce sales is lost annually as customers log off due to slow download times.

The business of Web advertising, too, is dependent on breaking through network traffic jams. Advertisers are looking to move beyond the simple banner ad, using animation, video, or other "rich" media technologies to draw surfers' attention. If a beautifully produced advertisement stutters and stalls on the Web, it will be unlikely to draw users' attention.

"The Internet was not designed for efficient content distribution," said Rangu Salgame, former president of Bell Atlantic's Internetworking division, and CEO of Edgix, one of the new companies. "With broadband access, there's now going to be much higher expectations from the end users."

Web companies have realized this for some time. Most big Web media companies maintain banks of servers distributed around the United States, or even around the world, to minimize the distance that any user has to go to reach their content. Many service providers also use "caching" servers, which make local copies of popular Web pages in order to speed their delivery to end users.

A Jupiter Communications survey in April found that these practices are becoming increasingly common, with 12 percent of Web sites serving up their content from multiple places, but 58 percent of companies planning to do so over the next year.

Cashing in on caching
It's that interest which has helped spark the new list of startups companies like Akamai and Edgix, which say they can take an ordinary caching model and turbocharge it.

Akamai, which opened its doors early this year, has already established itself as one of the leaders in the industry, selling its hosting services directly to prominent companies such as CNN, Yahoo, and Disney's Go Network. Like older competitor Sandpiper Networks, Akamai hosts its servers inside ISPs' networks, in an effort to bring specific pages close to readers.

This strategy has won the approval of many in the analyst community, who say media companies themselves need to do everything they can to ensure their content comes as quickly as possible to viewers' desktops.

"If I'm a content owner, I like the model where I buy [these services] myself," Rutstein said. "I'm not so sure I want to trust it to my ISP."

On the other side of the new business are companies like SkyCache and newcomer Edgix, which will use satellite transmissions to beam the most popular Web content directly to local ISP offices.

Rather than selling their services directly to content providers, these companies use their own traffic analysis software to determine what Web pages are most in demand by users, and then immediately send copies of these over their satellite connections to the ISPs.

SkyCache, a two-year old, privately held company that received financial backing from Intel in its recent second round of funding, has about 70 customers in the United States and about another 20 in Europe, with plans to expand into Asia and Latin America. Edgix received seed funding from Novell, and is set to launch in September, Salgame said.

iBeam Broadcasting also has a satellite-based content delivery system. The company, which uses Hughes Network Systems satellites, believes its system is more efficient and therefore can deliver content at a lower cost than land-based leased line connections such as T1s.

In the meantime, other companies are devising plans to horn in on the nascent satellite-fed caching market.

SoftNet Systems, owners of rural cable modem service ISP Channel, are considering using their Intellicom satellite unit to create an Internet caching business, according to executives.

Tentatively code named "SkyPop," the service would compete with the likes of SkyCache, iBeam, Edgix, and others.